How to Play Apple, Inc. after Earnings Announcement
Apple, Inc. Credit Spread (AAPL)
TheOptionPlayer.com recommends an Apple, Inc. (AAPL) short-term (7-day) neutral option strategy. Investors could simultaneously:
Sell the November one-week expiration AAPL $570 put for $2.16 (yesterday's closing price)
Buy the November one-week $565 put at $1.56 (yesterday's close)
The difference between funds received and paid out is a.60 credit which we keep if Apple stock closes above $570 on November 9th, but immediately exit the position if it appears the price will end up lower. See Guidelines page at www.theoptionplayer.com/ for explanation on how trade is set up.
Why we recommend it:
When announcing 3rd quarter earnings and revenue results last week Apple, Inc. (AAPL) disappointed investors by not reporting the usual knockout numbers. Apple is a major component of the NASDAQ 100 index (NDX) of technology stocks - which have been in a downtrend since reaching multi-year highs at the end of September. In fact, these technology stocks have been the worst performer among the major equity indexes over the past few months. However, over the past week NASDAQ price has stabilized and actually surged higher today as tech companies such as Priceline.com, Inc. (PCLN) and LinkedIn Corp. (LNKD) announced stellar 3rd quarter earnings results today. Tech stocks are bouncing higher with overall market in general and should also lift up Apple shares. Apple stock found support at its 200-day SMA as traders are stepping in to buy shares because they are oversold and deemed a good value at that price. At the very least there is a very high probability that the Apple, Inc. stock will remain above the $570 target for another week as it has not been that low since July.
52-Week High: $705.07
52-Week Low: $363.32